War on wage hikes results in a victory for Italian unity

ByCarolyn Friday, Special to The Christian Science MonitorJanuary 31, 1983

Rome
— Tough economic times in Italy have brought a measure of unity not seen here for 13 years, and also set an interesting precedent for fighting inflation. For the first time since 1947, the entire union movement voted for a voluntary slowdown in wages as proposed by the government.

This represents a significant retreat from the hard-line stance that has characterized labor relations in the 1970s.

What is more, in the final moments before a compromise was reached, support for the pact was given by the Italian Communist Party, which has been the nation's leading opposition party.

In addition, the compromise signed last week after a year of hard negotiating and bitter protests has averted the downfall of the two-month-old coalition government.

But the Christian Democrat prime minister, Amintore Fanfani, cannot claim the move as a victory. In exchange for their guarantee of peace, the Communists exacted a heavy price from the government in the form of concessions of higher tax rates for the rich and social security contributions. It is estimated the concessions will cost the government an extra $2.1 billion to $2.5 billion in 1983.

The three-year contract agreement reduces pay increases automatically awarded to workers in compensation for inflation, which now is running above 16 percent.

For all but the lowest-paid of Italy's approximately 21 million workers, the agreement means that wages will be cut 15 to 18 percent below the normally automatic cost-of-living increases. Previously, this escalator was on par with the inflation rate. The government agreed to reduce inflation to 13 percent this year, and 10 percent in 1984. The pact will also lower the workweek by a half-hour.

By supporting the accords, the union movement has taken a major step away from its role as a special interest group demanding to be appeased, toward a more cooperative position alongside the government.

By the same token, the Communist Party's backing of the agreement (after much soul-searching) has significantly enhanced its image as a ''responsible'' alternative party. This will probably enable it to reap some political benefits in the long run. Already, the party feels it is in a stronger position to push the government to invest in reindustrialization and social services, such as public transportation and health care.

Had the Communist-dominated CGIL union not signed the agreement, they would have run the risk of splitting the labor movement. Italy's other two main unions , the Socialist-backed UIL and the Catholic CISL, had long since agreed to come to terms on the escalator issue.

To the workers, who still remain among the best protected in the world, the agreement was presented as a ''defensive'' measure. By compromising on the terms of the escalator system the unions managed to keep the system alive.

Last June, in the midst of the negotiations on the national three-year wage contracts, the association that represents private industrial management, known as the Confindustria, announced it would rescind the escalator agreement signed in 1975. This had been a hard-won victory for the unions and they were loath to give up.

All that remains in question is whether Parliament will vote the money to pay for the historic agreement. Parliament must vote on such bills within 90 days.

In theory, with the Communist support of the plan, the bills should pass easily, but as always, with Italy's secret ballot system, the program runs the risk of being shot down by the ''snipers,'' as they are called, who are frequently from Prime Minister Fanfani's own Christian Democratic Party.